Return to a “realistic” market
Property market growth is set to return to more normal levels in 2016, predicts one major agency.
Monday, January 11th 2016, 12:40PM
by Miriam Bell
In 2015, New Zealand’s property market, led by the skyrocketing Auckland market, reached new price heights.
But now this appears to be changing – with the latest data showing that the Auckland market has levelled off.
Commentators are divided over what the prognosis for the longer term might be.
Barfoot & Thompson managing director Peter Thompson said their December sales data gave mixed messages as to where the Auckland market will head in 2016.
Others believe the Auckland market is simply taking a breather while buyers adjust to new rules introduced by the government and the Reserve Bank. [http://www.landlords.co.nz/article/5584/drop-in-apartment-investment]
However, Century 21 New Zealand national manager Geoff Barnett believes New Zealand’s property market is becoming a more realistic market again.
“We’re seeing auction clearance numbers generally falling, average selling times lengthening out, and median house prices not rising as steeply, particularly in Auckland.
“But, this was always inevitable and, in fact, it is a lot more realistic and sustainable.”
He said that in 2016 the market will still be relatively strong – given the regions are performing well, interest rates remain low, and Auckland’s population continues to grow.
“Rest assured, Auckland will keep trucking along.”
While the market eased back in the last quarter of 2015, people will soon get used to new rules and just work with them, Barnett said.
In his view, apartments will be property market story of 2016 – due to their more affordable entry point.
“At the same time, the quality of construction and the overall living environment has improved dramatically in many of the new apartment developments now coming on stream.
“That also ensures stronger capital gain prospects with banks now more willing to lend more on them.”
Low interest rates continue to make buying a more attractive proposition for many.
Barnett said this means that all eyes will be firmly on the Reserve Bank at the end of this month to see if the OCR is lowered again.
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